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A U.S. District Court has barred a purported former preacher, his two sons, and his companies from selling a healthcare business opportunity promising consumers millions of dollars if they participated in an alleged network of Medicaid providers. In fact, according to the Federal Trade Commission complaint, the defendants’ business model would have required participants to break numerous state and federal laws.

Using “healthcare conferences”at hotels and convention centers across the US, the defendants promised consumers that they would receive “guaranteed” Medicaid patients and would receive help from the lawyers, doctors, and other professionals on their staff in establishing their healthcare businesses. The FTC charged that the defendants misrepresented the assistance they would provide and that participants could legally earn money from the business, and did not provide participants with the required disclosure statement and earnings disclosures for a franchise. A U.S. District Court has granted a temporary restraining order, prohibiting the defendants’ from continuing their deceptive business practices, freezing their assets, and appointing a receiver.

The operation targeted church-going audiences, advertising their upcoming conferences on Christian radio and television networks. Their traveling road show visited at least 18 different US cities, drawing crowds of up to 1000 attendees, with many persons paying a $65 registration fee to attend. The defendants held “conferences” in Atlanta, Baltimore, Durham, Chicago, Dallas-Ft. Worth, Memphis, Jacksonville, Nashville, Macon, Columbus, Georgia, St. Louis, Philadelphia, Jackson, Mississippi, Norfolk, Richmond, and Austin.

At the conferences, individual defendant Jeffrey W. McLain would mix references to his alleged career as a preacher with descriptions of the huge rewards flowing from his business opportunity. The defendants claimed that they were millionaires and multimillionaires and that for a $2,495 investment, participants would have an opportunity to become as rich as they were. The defendants also ran a telemarketing operation in Marietta, Georgia through which they sold their business opportunity.

The defendants instructed participants to incorporate two companies – a non-profit organization, such as a church, and a for-profit healthcare company which would provide services to Medicaid-eligible clients. The defendants stressed to the participants that the ownership of the non-profit corporation needed to be untraceable to the healthcare company. The non-profit would collect donations, such as clothes and furniture, and distribute it to those in need, provided they gave the non-profit their Medicaid information. The participants were then supposed to funnel the Medicaid information to the for-profit medical services company that supplies its products or services to the recipient and bills Medicaid. The participant also could sell the Medicaid information to other providers and receive a referral fee between $100 and $500.

The sales pitch promised that lawyers, doctors, and other professionals would be available to guide participants through the incorporation and licensing of their two companies through the start-up phase, and would remain available to answer questions after the business was running.

According to the FTC’s complaint, the defendants failed to disclose that their business model would expose participants to either criminal or civil monetary penalties, as it would violate numerous federal and state laws. The complaint also alleges that they misrepresent that purchasers could legally make substantial earnings, and that they will receive assistance in establishing and managing their business venture. Finally, the FTC charged that the defendants failed to provide purchasers with the required disclosure statement and made unsubstantiated earnings claims.

The FTC received assistance in the case from the United States Postal Inspection Service in Atlanta, the Georgia Bureau of Investigation, and investigators from several different offices of the Attorney General, including their Medicaid fraud control units, from Maryland, Florida, Texas, Mississippi, Georgia, Pennsylvania, Tennessee, and Virginia.

The court entered an ex parte temporary restraining order against the defendants: Jeffrey Wayne McLain, also known as J.W. McLain; Alexander McLain; Victor McLain; Prophet 3H, LLC; Prophet 3H, Inc.; Georgia Home Health Care License and Certification Institute, Inc., doing business as GHLCI; Healthcare License and Certification Institute, Inc., doing business as HSLCI and HSLCC; and M7 Holdings, LLC. The FTC is seeking a permanent end to their deceptive business practices and redress for their victims.

The Commission vote to authorize staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Northern District of Georgia on July 18, 2006. The temporary restraining order was granted on the same day. A preliminary injunction hearing is scheduled August 1.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

Copies of the complaint are available from the FTC’s Web site at and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to thousands of civil and criminal law enforcement agencies in the U.S. and abroad.

Contact Information

Media Contact:
Jacqueline Dizdul,
Office of Public Affairs
Staff Contact:

David R. Spiegel,
Bureau of Consumer Protection